Retail SMEs are optimistic for 2021

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Retail SMEs are optimistic for 2021
Retail SMEs are optimistic for 2021

GS1 Mexico and the market research company Psyma Latina presented the 3rd edition of the GS1 Barometer 2020 – SME manufacturer of the consumer industry.

As with every edition, 500 companies participated in this edition. 74% small, 14% medium and 12% large manufacturers expressed their perception of their retail activities in 2019 and 2020 and their future vision, needs and concerns about the consolidation and development of their business.

The study shows that consumer industry manufacturers viewed 2019 as a good but not an excellent year, so expectations have been set for 2020. However, since this goal was not achieved due to the pandemic, companies were resilient, optimistic and innovative, confident that the situation will not improve significantly by 2021, but can stabilize. ”

The study interviewed owners (43%), managers (18%) and CEOs (12%). 66% of companies saw sales increase in 2019, 11% remained unchanged, 14% believed losses were minimal and only 9% saw sales decline sharply.

61% of organizations reported an increase in customers in 2019, while 23% reported no change or variation, 12% reported a slight decrease, and 4% reported a large decrease, putting them in an obvious scenario of crisis.

It should be noted that medium-sized companies saw their sales increase by 12% in 2019. In addition, the food and beverage category is the category with the smallest decline in sales (19%), followed by basic goods (25%).

2020 the year that changed life

The data shows that a greater number of Mexican business people are negatively affected by the health contingency. Various factors can be attributed, but in summary, this phenomenon arises from the lack of anticipation for the reality that is being lived, the study says.

However, the companies that have achieved some benefit allow us to see an encouraging future by adopting models that meet the challenges of the new era.

In 62% of the cases, the COVID-19 pandemic had a negative impact on their operations, while 25% had a positive impact and 13% had no impact.

By company size, 66% of small and medium-sized companies reported negative effects, while only 37% of large companies did.

GS1 Mexico

In terms of perceptions of the current 2020 situation and the impact of health contingency, 75% of organizations reported a decrease in sales, 5% said it remained stable, and 20% reported an increase.

In terms of the number of customers in 2020, 58% of companies reported a decrease, 24% replied that it had remained unchanged, and 18% indicated an increase in their customer portfolio.

According to company size, 59% of small companies, 58% of medium-sized and 44% of large companies reported a decrease in their number of customers.

The health contingency caused by COVID-19 had a negative impact on companies in the following areas:

  • Manufacture or manufacture of products – 58%
  • Logistics and operational processes – 55%
  • Customer relationships – 48%
  • Relationship with suppliers – 45%

Business success factors 2019 and 2020

  • Logistics and sales
  • Relationship with the retail chain
  • Packaging (design) – attractive packaging

Success factors that dominated companies in 2019

  • Optimal raw material for the product
  • List / Fixed Prices – Product Prices
  • Finished product with no defects
  • Packaging (design) – attractive packaging

Success factors that will dominate companies in 2020

  • Optimal raw material for the product
  • List / Fixed Prices – Product Prices
  • Finished product with no defects
  • Packaging (design) – attractive packaging
  • Variety of presentations

Success factors that companies can improve in 2019

  • Logistics and sales
  • Relationship with the retail chain
  • Quality certificates (e.g. ISO)
  • Variety of presentations
  • Prices with discounts / promotions – discount and action plan

Success factors that companies can use to improve 2020

  • Logistics and sales
  • Relationship with the retail chain
  • Quality certificates (e.g. ISO)
  • Product innovation / technology

Internet as a tool

The use of internet-based business programs continues to increase, of course, but “”Without a doubt, the health contingency caused by COVID-19 in businesses around the world has marked a before and after by becoming the major disruptor of corporate digital transformation and the accelerator of trading strategies for electronic, digital marketing, product delivery, and replenishment. Omnichannel is here to stay, ”said Simeon Pickers, CEO of Psyma Latina.

The study highlighted that the internet as a business tool was mainly necessary because of the pandemic rather than a growth plan.

In this context, four in ten companies (38%) do not have a company website. However, 45% of the organizations consulted make online sales through various marketplaces. Of this percentage, companies use Amazon (60%) and Mercado Libre (57%) because of their user-friendly interface to smartphones and other devices and are not only used the most. Other ecommerce platforms businesses use are: 7% Shopify, 6% Linio, 4% Second Hand, 1% eBay, and 26% Others.

Companies venture into selling online even without even delving into the required knowledge, which could lead to bad experiences and leave this type of transaction in the future.

Given this scenario, training is key to professionalizing ecommerce strategies, as well as expert advice to put your products on the digital shelf with a clear strategy for pricing, promotions, deliveries, and returns.

When it comes to social networks, companies use them to communicate, position, and market their products. The most commonly used are:

  • 7 out of 10 companies use Facebook – 73%
  • Every second company uses Instagram – 48%
  • 2 in 5 companies use Twitter – 21%.

Reasons why 33% of businesses don’t sell online include:

  • 44% ignorance within the company about the e-commerce model.
  • 33% lack of investment in technology.
  • 33% difficulty implementing a new business model.
  • 17% concerns about security and fraud prevention.
  • 21% others.

Human capital

Employees and co-workers continue to make a difference in organizations as generators of innovation and creativity and thus develop theirs Soft skills When they are trained to master their jobs, they can face the crises and contingencies that may arise in the future.

Around 2021

“It is clear that we live in a context of constant change and disruption in economic, social and health matters. So if we integrate the elements of flexibility, resilience, solidarity and innovation into business strategies, we can face the challenges of the near future by the best way, ”says the barometer.

54% of the companies surveyed expect 2021 to be a better year, 41% believe it will remain stable and 5% believe that the situation will get worse.

Although the challenges are more difficult, advances in technology and the will of the manufacturing sector in Mexico remain key elements in projecting a year of positive change in 2021. Companies are characterized by resilience, innovation and sustainability.

You can download the full study of the 3rd edition of the GS1 Barometer 2020 – SME Manufacturers in the Consumer Industry from this link.

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